The beginning of ‘Dry January’, a month when many people do not drink alcohol, usually brings a higher level of attention to non-alcoholic drinks. But the CEO of one of the leading non-alcoholic beer companies said that the demand for non-alcoholic beer has been increasing for more than a month.
“This is the moment we’ve been waiting for in the category,” Bill Shufelt, CEO of Athletic Brewing, said on CNBC’s “Squawk Box” on Wednesday.
A sleepy category in the wider beer industry, non-alcoholic beers have seen drastic growth in recent years as larger beer giants like AB InBev and Heineken launching new products as well as the emergence of independent brewers like Athletic Brewing. AB Inbev, which owns brands like Budweiser, Corona, Michelob, and Modelo, previously set a target of making 20% of its non-alcoholic and low-alcohol beer volume by 2025.
The lack of quality non-alcoholic beer options was the impetus for Shufelt, a former trader at Steve Cohen’s Point72 Asset Management, to start the Connecticut company in 2017, which focuses solely on non-alcoholic beer brewing.
“[Non-alcoholic beer] has gone from 0.3% of the beer category and a total afterthought and judgmental beverage box to something that is really exciting, aspirational, and kind of reframing how modern adults think,” said Shufelt.
Shufelt said non-alcoholic beer now makes up more than 2% of all beer sold in U.S. grocery stores, and at some national chain retailers, more than 8% of the beer category.
Beer cans are packaged at Athletic Brewing’s brewery and non-alcoholic production on March 20, 2019 in Stratford, Connecticut.
Spencer Platt | Getty Images
Growth of the non-alcoholic beer category
With more consumers choosing non-alcoholic beer to switch to healthier drinking alternatives and safer drinking habits, the global non-alcoholic beer market has risen to $22 billion by 2022, according to GMI Insights, which projects it could reach $40 billion in the year 2032. According to Nielsen, non-alcoholic beer grew 20% in the US in retail dollars last year.
However, non-alcoholic beer makes up a small percentage of the total global beer market, which is worth more than $750 billion.
But the growth of the overarching category has helped Athletic Brewing, which Shufelt said has a 55% market share of non-alcoholic craft beer. Athletic Brewing has $37 million in revenue by 2021, a three-year revenue increase of 13,071%, according to Inc. Magazine.
In November, Neat dr. pepper made a $50 million investment into Athletic Brewing, receiving the same minority equity stake as other lead investors such as TRB Advisors and Alliance Consumer Growth. To date, Athletic Brewing has raised more than $175 million.
This latest investment allows Athletic Brewing to invest in facilities in Connecticut and San Diego, helping the brewery “become a very different non-alcoholic beer producer,” Shufelt said.
“It’s an investment that no one else in the category has, so Athletic is really pulling it forward,” Shufelt said. “We passed the biggest brands in the overall category, and are on track this year to be the number one player overall.”